Ottawa (Rural Roots Canada) – Expect your grocery budget to take another hit in the new year.

The Canadian Dairy Commission says it will increase the farm gate milk price by 2.2% starting in February. That translates to just under two cents per litre.

The increase comes following a review and consultations with stakeholders. It takes into account rising production costs for dairy farmers as well as the consumer price index.

In a release, the CDC says producers have seen cost increases in feed, fertilizer, fuel, and interest rates, on top of disruptions to the supply chain that continue to add pressure. Investment and productivity gains at the farm have helped offset some of the increases.

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This upcoming price hike comes after the commission approved two additional price hikes in 2022, including a 2.5% increase in September and an 8.4% increase this past February. It translates to roughly a 10 cents per litre hike in the farm gate milk price in the last 12 months.

The price paid to farmers is only part of the price paid by consumers. Other factors, such as transportation, distribution, and packaging, can also have a cost impact on customers.